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M/s Trimatic Engineering Co. P. Ltd. Versus Asst. Commissioner of Income Tax

2015 (4) TMI 627 - DELHI HIGH COURT

Entitlement to deduction u/s 80I - Whether relationship of master and servant is necessary to claim deduction under 80I - Held that:- There is nothing in Section 80I(2)(iv) to say that the relationship in order to qualify for the term “employment” must be one of master and servant and cannot extend to contractual employment. That the concept of permanent or direct workmen is the precondition envisioned in Section 80I(2) when it was the term “employs” does not appear to be reflected in the statut .....

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be entitled for deduction under Section 80I. In other words, even though the ownership of unit, from which the profit was derived by the industrial undertaking claiming deduction under Section 80I, did not vest with it, the Court held that it was entitled to the said benefit - Decided in favour of the assessee - ITA 126/2001 - Dated:- 7-4-2015 - S. Ravindra Bhat And R.K.Gauba JJ. For the Appellant : None For the Respondent : Mr. Rohit Madan, Mr. Ruchir Bhatia and Mr. Akash Vajpai, Advs. MR. Just .....

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Section 80I to the extent of ₹ 92,251/- being 25% of the profit i.e. ₹ 3,69,005.00. The AO declined it and included the amount in the taxable income by the impugned order dated 23.3.1989. The AO was of the opinion that since the employees engaged by the assessee were through a contractor and not its own employees, the assessee could not be said to have qualified for the said deduction by reason of Section 80I(2)(iv). The assessee appealed to the Commissioner of Income Tax (Appeals) w .....

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eduction under section 80I. The ITO will, therefore, look into the claim of the assessee for deduction under section 80I and satisfy himself that at least 10 workers were engaged in the manufacturing process during the year and allow the deduction as per law. 3. The revenue s appeal to the Income Tax Appellate Tribunal was accepted and the order of the CIT(Appeals) was reversed. The ITAT held as follows : I have heard the rival submissions. Admittedly, more than 10 employees were not on the pay .....

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regard by the assessing officer is correct in my opinion. Accordingly, I reverse the order of the Commissioner of Income Tax (Appeals) and restore that order of the assessing officer. 4. This Court has carefully considered the grounds of appeal as well and heard the counsel for the revenue. Section 80I enables deduction in respect of profits and gains from industrial income to the extent of 20%. This Court is at present concerned with the one provided in Section 80I(2)(iv). The same reads as fol .....

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